Storage top Q1 performer for Brocade

Storage sales continued to account for the bulk of Brocade's business in its recent fiscal Q1, in spite ofits efforts to expand into the networking arena. According to CEO Michael Klayko, steadygrowth in the firm's Ethernetfabric and converged networking business piggybacked onthe success of its st

Storage sales continued to account for the bulk of Brocade's business in its recent fiscal Q1, in spite of its efforts to expand into the networking arena.

According to CEO Michael Klayko, steady growth in the firm's Ethernet fabric and converged networking business piggybacked on the success of its storage lines.

"This indicates to us [that] customers continue to turn to Brocade to connect servers and applications to storage regardless of the networking technology they use," he said.

"There's a lot of new data centre buildouts. What we've concluded is that Fibre Channel and SAN is still the preferred technology for the vast majority of large customers when it comes to building out their data centres," added Brocade senior vice president of worldwide sales and marketing, Ian Whiting.

"Through our OEM partnerships but also through our own direct approach to these customers we are seeing the benefit of that given our position," he said.

Quarterly net profit at Brocade tumbled 47% year-on-year to $27m (£16.6m) as increased costs within the business continued to weigh heavily on the company's performance.

However, with total sales up 12% to $546m and EPS - excluding items - coming in above analyst forecasts, shares in the networking vendor bounced upwards at the end of last week after it filed numbers for the period ended 29 January.

In contrast to rival Cisco, which used its recent quarterly conference call to bemoan weakness in key public sector accounts, Brocade said it would take a more aggressive stance and expected to see that area heading in the right direction soon.

There was sequential improvement in Brocade's OEM sales, which made up 66% of the total figure, or about $360m, with three vendors, EMC, HP and IBM contributing over 10% each. Meanwhile, channel sales improved year-on-year to 34% of the total, around $185m.

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